From Neighbor to Enemy: A Lesson in Trust

Karen Conroy, EO Central Florida member and president and CEO of Fundraising for a Cause, Inc.

It sounds like a made-for-TV movie, I know. At the time, I wish it had been. But looking back, I’m glad it happened.

The Trusting Neighbor

Last year, my unemployed neighbor approached me about a job. I happened to have an opening in the shipping department. I felt bad for the guy and never had a problem with him as a neighbor, so I gave him the job.

He worked for me a total of three months. Turns out, he was lazy and constantly called in sick. My company was growing and I needed dedicated employees, so we had a talk and parted ways. I thought that was the end.

The Nightmare

Six months later, one of my vendors in China informed me that my neighbor had contacted their factory about getting my products reproduced. Luckily, most of my company’s products were trademarked and could not be duplicated. Nevertheless, I felt violated and upset that someone would do this.

My attorney served him with a cease and desist, and I thought the ordeal was over. A few weeks later, one of my large clients called to tell me that my neighbor had contacted them.  My neighbor showed them photos he had taken of my product invoices while working in my warehouse, telling them he could sell them my items at a lower price. After some research, we found that my neighbor incorporated a company while he was “working” at my company and started a website.  Seems he had no intention of being an employee, he just wanted to steal information.

The choice now was to file a lawsuit or not. I debated, but ultimately, I decided not to file. Did I want to take $50,000 to pay my attorney’s fees or use that money to grow my business?  It would be a lot of time and energy going after him and I knew he didn’t have any money.  More importantly, I knew he wouldn’t be successful.

Lessons Learned

Since then, I have put a number of tactics in place to ensure something like this never happens again.

  1. All new employees must go through an extensive application process including a background check, regardless of who they are.
  2. I developed an employee handbook and had an attorney draft a non-compete and a confidentiality agreement that everyone must sign.
  3. I keep my emotions in check. The experience was traumatic but I had to think logically about what was most important to the company long term.
  4. I updated all my trademarks–it is expensive, but it’s worth it.
  5. I installed security cameras throughout the warehouse.
  6. I purchased a dedicated IP address, so nobody can access important company information from home.

The incident with my neighbor was unfortunate, but it helped open my eyes to the myriad of issues that could arise when you run your own company. It’s not the first time and definitely not the last, but next time, I’m prepared.

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One Response to “ From Neighbor to Enemy: A Lesson in Trust ”

  1. Brad on

    Instead of looking it entirely as a misfortune, it is great that you saw it as a learning experience. My experience is different since this involves my tenants. I have many bad experience with difficult and abusive tenants before and learned that I need to perform background check first before accepting tenants.

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